tekjuskrefi

Tekjuskrefi, an Icelandic term, translates to "income stepping stones" or "income milestones." It generally refers to a system or policy designed to encourage individuals to increase their earnings gradually. This often involves a phased reduction in welfare benefits or tax credits as income rises, ensuring that individuals always earn more by working more. The core principle is to avoid the "welfare trap" where taking on more work results in little to no net financial gain due to the withdrawal of benefits.

The specific implementation of tekjuskrefi can vary. It might involve adjustments to unemployment benefits, social assistance, or certain tax deductions. The aim is to create a smooth transition from unemployment or low-wage employment to more stable and higher-paying work. By making the financial rewards of increased employment clear and consistent, tekjuskrefi seeks to motivate individuals to seek out and accept new job opportunities. This approach is a common component of active labor market policies in many countries, including Iceland, designed to promote economic self-sufficiency and reduce dependency on state support.